30 April 2006

For readers of the QBrand QBlog who are in the industry, I will be speaking this Thursday 4 May on "The role of medical representatives in product and company branding" at the PharmaMarketing and Sales Congress 2006, being held at the Stamford Plaza in beautiful North Ryde (Sydney), hub of the pharmaceutical industry in Australia. NOTE: You won't find my name on the website or brochure, as I am a late inclusion in the program.

29 April 2006

This photo (click on the thumbnail to see in full size) shows a typical example of what I wrote about a few weeks back on the problems with many of Melbourne's milk bars. The bright blue awning only serves to emphasise how desperately unappealing and uninviting is the rest of the shop's facade by contrast (that's socks, undies and cheap toys in the left display window). If I were Nestlé Peters, I'd be asking for my money back - being seen in this sort of setting does nothing positive for the Drumstick brand.

But, thankfully, there are some milk bar proprietors who "get it" - watch this space!

There are “moments of truth” in any service encounter. For organisations that use outbound calling as a selling or relationship management tool, the first moment of truth is when the customer puts down the saucepan, the baby or the remote control and picks up the phone.

Several current call centre practices – used by, or on behalf of, some very large and prominent organisations – demonstrate a very poor understanding of the strategic importance of this first impression.

First are the calls that begin, not with a friendly human voice, but with a few seconds of ambient room noise. Often, this is long enough that I find myself saying “Hello” for a second or third time. Occasionally, it’s so long that I have given up, hung up and walked away… annoyed. Once or twice, the phone has rung again 30 seconds later, and the caller (a real human this time) confirmed that it had been them calling earlier.

The information pages of the White Pages used to carry advice on what to do if you received a call where you just heard breathing on the other end. But apparently it’s OK for a call centre to make “nuisance calls”. It’s all because of predictive dialling technology, which enhances call centre efficiency by letting the human staff avoid busy signals, answering machines, modem lines and faxes. When I complained to a call centre supervisor about getting a call from a “breather”, I was told - in no uncertain terms - that her organisation’s “silent call” rates were perfectly within the range suggested in regulatory guidelines (in the US, a maximum of 3% of predictively-dialled calls are permitted to be dumped).

OK… so this is operationally optimal and it meets the letter of the law. But the telephone is, after all, a communication medium. And what this practice communicates – unequivocally – is that the marketing organisation considers the customer’s time, convenience and peace of mind far less valuable than the time of one of its call centre operators.

Now the second example: I answer the phone and there’s a voice I don’t recognise on the other end. “Is that Mr Downes?” - “Yes” - “How are you today?” Often, I can’t stop myself replying “Who wants to know?!”

Why are call centre staff being trained and scripted to ask people how they are before introducing themselves? What kind of thinking leads to a practice that ignores a basic social script? Does some sales manager or team leader think the operator will win me over with a patently insincere enquiry about my health before I even know who’s calling? You ring me, at my home, and you already know MY name. Don’t expect to make small talk until I know who YOU are!

Role and script theories are very important in service provision. When basic social scripts are tampered with, customers feel uncomfortable. Most get nervous, many get defensive and some get hostile. None of these emotions is an effective foundation for listening, comprehension, persuasion, all of which are critical steps in any customer communication.

27 April 2006

Some more tips on selecting a brand name to follow on from my interview in today’s Herald-Sun (Business Owner section, p. 68):

1. Don’t agonise over finding the name that perfectly describes what you do or what you sell. In fact, you should avoid being obviously descriptive, because: (i) a name that is descriptive is very likely to be rejected for registration as a trade mark on the basis that it is not inherently capable of distinguishing the source of goods and (ii) your competitors will most likely be perfectly entitled to use very similar names.

2. Don’t try to be too clever. Distinctiveness and memorability are the two key characteristics you should pursue in a brand name. Names that are too smart or obscure will be more difficult for customers to remember, less likely to be passed on through word of mouth or just plain unappealing.

3. Choose a name that is suggestive - not in the Benny Hill sense - but a name to which suitable meanings and associations can easily be attached. For example, “Amazon.com” is not a name with any intrinsic link to books or online retailing, yet it is distinctive, easily remembered and readily acquired meaning and associations. It is also flexible enough to encompass a wide range of goods, not just books.

4. Think ahead. Where do you see the business going in one, two or five years’ time? Use your imagination! Consider whether you would want to use the same brand name (or a related name) for each of the additional goods or services you might launch. If so, the name you choose today should be both adaptable to new product lines and transferable to different categories and markets.

5. As you build your business, your brand will become your most important and valuable business asset, as it crystallises the value of the customer awareness, preference and relationships you have built over time. Hence, when it comes to selecting brand names and other identity elements, you should strongly consider consulting a marketing/brand identity consultant for specific strategic advice and a patent and trade mark attorney for legal and registration advice.

23 April 2006

Several existing Sanitarium breakfast products have been re-branded so that they now reside more clearly under the Weet-Bix umbrella. HI BRAN, which previously carried only a small Weet-Bix "endorsement", is now clearly Weet-Bix Hi-Bran. Good Start, which previously carried no reference at all to Weet-Bix, has been re-branded Weet-Bix MULTI-GRAIN (that's if you can find it - they were out of stock at two Coles supermarkets this weekend).

At the same time, Sanitarium has launched three new Weet-Bix brand extensions. First, there's Weet-Bix Crunch, which consists of sickly sweet mini-sized Weet Bix described as "bite sized pieces packed full of energy and blasted with honey". Then there's Weet-Bix KIDS, a product line created especially for 1 to 5 year-olds and heavily co-branded with The Wiggles in its packaging and promotion. Third, there's Weet-Bix Organic. Strangely, a low sugar, low salt version of breakfast biscuits that look identical to regular Weet-Bix are still called (uninspiringly) Lite-bix.

Consolidating a wide variety of products under a single brand is based on the presumption that this configuration will optimise the economic benefits from leveraging brand equity. I think it's reasonable to assume that the Weet-Bix brand can carry a broad range of sub-brands, although I do hope Sanitarium has done its homework (i.e. well-constructed consumer research) on this front.

But re-branding itself carries a number of risks. First, some consumers may think the re-branded offering is no longer intended for them: it's possible (for example) that some consumers actually preferred Good Start because it wasn't Weet-Bix (e.g. the slogan "Aussie kids are Weet-Bix kids" suggests to them that Weet-Bix is not a brand for adults). Second, and perhaps most obviously, loyal customers may not recognise or be able to find the re-branded product, and/or they infer that the new version has been re-formulated. The most instructive instance of this in recent years was Lipton's disastrous 2002 re-branding of its regular tea as "Black Tea", which necessitated a costly and dangerous advertising and in-store rescue campaign (see this report from B&T) and RE-re-branding. I say dangerous, because Lipton's message that Black Tea was "the technical term for the tea you love" sounded condescending and was interpreted by some consumers as implying that any confusion was their own fault for being ill-informed about tea... or just plain stupid.

19 April 2006

Next time you're in the breakfast cereal aisle at your local supermarket, check out new Nestlé Nesquik (as if we needed another chocolate flavoured breakfast food). You're most likely to find it right next to the Kellogg's Coco Pops.

Now compare the two products - Nesquik and Coco Pops (or, in the meantime, just examine our photo). Conveniently, each comes in a 450g box. Each package is predominantly yellow in colour. Each features a zany, brown, "teenage" cartoon character wearing a contemporary T-shirt (the Nesquik Bunny and Coco the Monkey, respectively). Each features a dynamic illustration of a bowl practically bursting with milky, chocolate-y goodness! The similarities are obvious in the context of the cereal category.

But please don't jump to the conclusion that Nesquik is "knocking off" Coco Pops. First, consider where Nesquik has come from. Nesquik is a very well-known and well-recognised brand name, especially among children and parents. The Nesquik name (or Quik, as I knew it growing up), the yellow colour and the brown bunny are very well established as brand identity elements in the flavoured milk category and have been used in other Nesquik brand extensions. They are also among the logical "levers" for Nestlé to use in extending the Nesquik brand into the breakfast cereal category.

It looks like this might be just one of those rare occasions when two brands arrive at the same place at the same time, by accident. Coco Pops has long positioned itself as "just like a chocolate milkshake... only crunchy!", i.e. cereal moving towards flavoured milk. Through category extension, Nesquik is moving from its base in flavoured milk towards breakfast cereal. In other words, a collision was pretty much unavoidable. Consequently, it seems unlikely that we'll see bowls of Coco Pops and Nesquik cereal being scrutinised as exhibits in the Federal Court.

IMPORTANT NOTE: QBrand is not aware of any legal action foreshadowed, instituted or ruled out between any of the brands or parties named in this story. This article should not be construed as providing expert opinion or advice on any such matter.

17 April 2006

Intending to prepare for a class I will be teaching later this year (my Brand and Product Management course includes Professor Kevin Keller's Starbucks case), I visited the Starbucks Australia website today (17 April). The site gives every appearance of not having been updated since December 2004: the last entry on the "Press Room" page is about the (global) Corporation's response to the Asian tsunami disaster.

How is Starbucks doing in Australia? Where is it heading? How many stores does it now have? Is it changing its business model from 100% company-owned stores to a franchise operation (like its apparently more successful competitor, Gloria Jean's)? What is its current approach to store location after it made some poor initial choices, like its now-closed store in Toorak Road, South Yarra?

Latest information on the Starbucks Australia site says it has 50 stores "to date". This was the figure it gave as its initial target when it launched here in 2000 (see this press story from 2004), but one suspects that this is well out of date. No info that would help answer any of my other questions, either.

By comparison, the Gloria Jean's Coffees website lists 51 stores in Victoria alone, and the latest item in the "Media Centre" is dated 10 April 2006, i.e. just last week. Interesting, too, that Gloria Jean's is apparently making a go of its store at Borders Skygarden in Sydney... one of the very locations where Starbucks closed down in 2004 (see the press story cited above).

On any reckoning, Starbucks has failed to take Australia by storm the way it did the United States. Of course, in the US it "created" a mass-market coffee culture where none had previously existed, and where feeble filtered brews were the dominant offering even in decent restaurants. And while I would be the last to suggest that you should judge a business by its website alone (the web is a great leveller), its lack of web presence certainly supports the impression that things at Starbucks ain't so Grande (pronounced "grahn-day").

PS. For those who are curious, QBrand's daily coffee needs are met by our neighbour Tony Romanella at Caffe di Lusso, 818 Glenferrie Road, Hawthorn, recently named in RACV's RoyalAuto magazine as one of the 10 best places to get a coffee in Melbourne. But it's never just about the coffee is it? At di Lusso, Tony's personality and empathic service orientation, the atmosphere and the fellow customers (e.g. from the odd Collingwood AFL star and Jellis Craig real estate agents to MLC mums) all contribute to a unique service experience.

15 April 2006

MTV, once a youth music powerhouse, is now a house brand! Coles-Myer has licensed the MTV brand and you'll find it in your local Coles supermarket applied to a broad range of otherwise "generic" CDs, DVDs, cassettes, cheap AM/FM radios, headphones, and other accessories. Yep, the subject of numerous business school and textbook case studies now takes its place not in the brand pantheon alongside Virgin, Microsoft and Apple, but rather in the bottom of the shopping trolley with Coles' "Farmland", "Savings" and "Reliance".

Globally, under new leadership, MTV is supposed to be trying to recapture its "cool" (see Business Week). I can't see how allowing its name and logo to be used on cheap, supermarket-grade consumer electronics and accessories could possibly help the MTV brand. But I can see lots of risks: there's evidence already that consumers are finding fault with the quality of MTV-branded recordable CDs and DVDs, and transferring that association to the MTV brand overall (see this consumer forum).

Of course, in Australia, MTV never achieved the heights of popularity or supposed cultural influence it did in the US or even in Europe and Asia, and it has a long history of being represented here as a licensed property rather than making its own way. Indeed, MTV was introduced in Australia in 1987 as late-night weekend programming on the free-to-air Nine Network (low-rent airtime previously occupied by the likes of Deadly Earnest, Hal Todd and Issi Dye). With Richard Wilkins as the host and face of MTV Australia, it was always mainstream and highly-processed - pretty suitable for the supermarket aisles, when you come to think about it.

But this move down market seems particularly bizarre given that MTV now has a lot at stake in Australia with its own wholly-owned cable channel and stiff competition from the home-grown Channel V. There's nothing particularly "cool" about Coles (other than the frozen food section).

14 April 2006

The Sunday Life supplement of the Melbourne Age newspaper recently carried an item about the release in Japan of Kit Kat Sakura (cherry blossom), a springtime variant of the confectionery brand that is said by the J-list to have become "the new Pocky" in Japan, based in part on its status as a lucky charm (see this BBC report). In fact, Kit Kat in Japan has a history of bizarre seasonal variants, from lemon cheesecake to green tea. Likewise, in Australia as well as the UK (Luscious Lime) and the US (Mint and Milkshake), Kit Kat flavour variants have emerged increasingly over the last few years (you can see a great collection here).

At least these line extensions - from Blood Orange to Black Bean - have had one thing in common: the classic four-fingered Kit Kat configuration of ingot-shaped, chocolate-coated wafer biscuits that has been around since the 1930s. Never mind the flavour or the language, Kit Kat has always been easily recognisable in any market.

Product shape or form is one of the quintessential identity elements of the Kit Kat brand. The advertising catchphrase "Have a break... have a Kit Kat" (registered Trade Mark No. 486933 in Australia) is based on the notion of breaking off individual "fingers". There's even a characteristic hand action required to separate the portions. That's the essence of what the name Kit Kat calls to mind, the anchor for the network of brand associations in the minds of consumers.

Even when Kit Kat "chunky" bars were introduced a few years ago, they retained clear links to the classic via the ingot shape of the bar and the (allegedly) humorous advertising line "You deserve the big finger".

Yes, Kit Kat Temptations is indulgent - self-indulgent, driven by the kind of brand egotism that says "we can put our brand name on any kind of confectionery and it'll sell". The risks of cannibalisation and consumer confusion are very high. This is apparently well recognised in the UK, where a recently-departed marketing executive at Nestlé Rowntree has been criticised for his aggressive pursuit of brand proliferation (see this story from Brand Republic) and its potential to damage the Kit Kat brand.

But the message seems not to have been heeded Down Under. This looks like another case of the new marketing myopia - a shortsighted and short-termist approach to the exploitation of brand equity that's just as dangerous as the one Theodore Levitt described in 1960.

UPDATE (Easter Saturday): Just saw the ad for Kit Kat Temptations at the movies and it's a shocker!

13 April 2006

In 1982, I lived in a shared student house in North Melbourne that enjoyed a collective obsession with Twisties (among many other quirks that I won’t go into here) and a ritual that involved tying up the empty Twistie bags in a particular way, then displaying them in a large fishbowl. Only one pack size would do. And definitely no chicken flavour – only cheese was acceptable!

Any Australian will tell you Twisties are a cheese-flavoured cereal-based snack manufactured by an extrusion process that results in portions of an irregular and gnarled or knobbled appearance (as officially defined in the Federal Court).

Like Vegemite, Twisties is an iconic and quintessentially Australian brand that evokes the taste of home for expats and – like Proust’s madeleine – often leads adults to fondly recall childhood experiences. What Australian of a certain age doesn’t remember the taste and texture of a Twisties-filled buttered roll from the school tuck shop? Or is that just me…?

Anyhow… in recent months I have amassed a collection of products now being sold under the Twisties name that bear little or no resemblance to the “flagship” or “anchor” product for the brand: popcorn, rings, zig-zags and even hot dog shapes, in a range of flavours. The Smith’s Snackfood Company is at least half right in recognising that the brand equity of Twisties resides primarily in intangible brand associations carried in the minds of consumers. But it doesn’t necessarily follow that the Twisties brand can therefore be extended to any type of snack food.

There are two critical risks from an undisciplined approach to brand extension.

Firstly, extensions have feedback effects on the parent brand. The more disparate the products the Smith’s Snackfood Company tries to position under the Twisties brand umbrella, and the poorer the perceived fit with the parent (popcorn?!), the greater the risk that the Twisties brand will lose distinctiveness and meaning.

Second, brands with rich cultural connections (as per my earlier anecdotes) engender not only strong brand resonance but also a deep sense of “ownership”. Want an example of consumers taking back “their” brand? Try buying a can of New Coke!

12 April 2006

Another Commonwealth Bank encounter of note (different branch). It's a quiet time, mid-morning, two tellers free and no-one in the queue. One teller makes eye contact as I walk in the door and watches, smiling, as I walk the length of the branch and up to her window.

TELLER: Thank you for waiting.

ME: But I didn't have to wait - you saw me walk in. Have you been told you have to say that to customers?

TELLER: [Embarrassed nod and laughter]

At a personal level, a positive and empathic moment. From the perspective of a customer of the bank, a perfect example of non-discretionary scripting of the service encounter that leads to perceptions of what Lovelock et al call "mindless service performance".

11 April 2006

NEWSFLASH: The Commonwealth Bank is considering installing tougher security screens in its branches… to protect its customers from rabid bank tellers making frenzied and uninvited attempts to “upsell” financial services.

Last week, the guy ahead of me in the queue at my local branch was browbeaten by a teller in full hearing of other customers, despite making it clear that he was just there to deposit a cheque: “I see you have a very large balance in your account. Would you like to speak to someone about investments? What about a term deposit? Speak with a financial planner? What about insurance? Business accounts?” No thanks, but where do I go to take out an intervention order?!

Memo Ralph Norris and Michael Cameron at CBA: As a sales technique, this has the same predicted success rate as spam email ads for Viagra. As a relationship-building technique, it's the equivalent of stalking.

10 April 2006

Only a few years ago, liberalisation of supermarket trading hours in Victoria was widely opposed in the name of protecting the interests of the classic corner milk bar and “mixed business”. Milk bars just wouldn’t be able to compete, went the argument.

The reality today? Forget the supermarkets, most milk bar proprietors are their own worst enemies!

Impressions of the typical milk bars in my area (the leafy, well-to-do Eastern suburbs)… windows smothered in cheap, fading posters for obscure phone cards. Poorly lit, visually cluttered and difficult to navigate. Dusty inventory of jam jars, biscuits and instant coffee on home-made pine shelving, overshadowed by tacky plastic toys and no-name socks and underwear. A VCR playing non-stop Chinese movies on a portable TV behind the counter. Distinctly domestic cooking smells wafting from the residence and disinterested counter staff in regular street clothes (whatever happened to the old apron?).

In other words, it’s the absolute antithesis of the kind of environment that’s conducive to buying fresh milk, fresh bread, sweets and treats like ice cream.

Smart retailers have recognised for years that the shopping experience begins long before the customer enters the store and that it involves all of the senses. Real estate agents know about “street appeal” and the smell of a freshly-baked loaf of bread or cookies during an “open for inspection”. So why do people choose to run a milk bar if they don't understand or care about the basics of the consumer experience when buying "fresh" food?

And, seriously folks, what is with the phone cards? What’s the retailer margin? What inventory do they need to stock? Just how many consumers in the Eastern suburbs are looking for cheap calls to Mongolia? (I’ve only ever met one Mongolian in Melbourne.) The benefits of this intrusive and ugly promotion can’t possibly justify the negative aesthetics and the loss of natural light.

Meanwhile, judging by the way it is redesigning and refitting its supermarkets with street frontages, Coles Myer clearly recognises that the local and convenience shopper is attracted by large open windows revealing other shoppers enjoying a brightly-lit, attractive and well-organised shopping environment. Put the fresh and impulse stuff near the entrance, add some express checkouts and a friendly smile and… wait a second, that’s pretty close to what the old milk bar offered, isn’t it?